Despite a broad continuum of phenotypic variation in behavior, individuals with autism spectrum disorders (ASD) share core deficits in social interaction. Here we propose that social dysfunction in ASD results, in part, from impairments in deriving vicarious reinforcement from others. Observing what happens to others powerfully shapes normal human learning and behavior. Such other-regarding outcomes can drive observational learning, and motivate behaviors such as cooperation, as well as envy. Empathic responses associated with vicarious reward appear early in ontogeny, and their impairment in neuropsychiatric disorders like ASD can have devastating consequences. Understanding and treating social dysfunction in ASD will be advanced by discovering and manipulating the neural mechanisms that derive vicarious reward and punishment from what happens to others. Although brain-imaging studies have revealed some of the neural circuitry mediating social interactions, the neuronal mechanisms underlying vicarious reward remain unknown. We will use our new behavioral model of vicarious reward to determine the underlying neuronal mechanisms, delineate the impacts of network dysfunction due to reversible inactivation of ACC or OFC on vicarious reward and other-regarding behavior, and define the effects of oxytocin (OT), a potential therapeutic intervention for ASD, on behavior and neural function.